BTG’s Net Income Drops Amid Decline in Principal Investments

Net income declined to 650 million reais ($283 million), or
72 centavos a share, from 822 million reais, or 93 centavos, a
year earlier, the Sao Paulo-based company said yesterday in a
statement. That missed Deutsche Bank AG’s estimate of 881
million reais.

Principal investments, which includes private equity, real
estate and proprietary trading, incurred negative revenue of 313
million reais in the second quarter, compared with revenue of
687 million reais a year earlier, according to the statement.
The reversal in BTG’s biggest business was fueled by a drop in
the stock of BR Properties SA (BRPR3), in which BTG has a stake of about
25 percent. Shares of the Sao Paulo-based real estate developer
slid 15 percent in the second quarter.

BTG, led by Chief Executive Officer Andre Esteves, 45,
helped underwrite the world’s biggest initial public offering
this year. The investment-banking business generated 175 million
reais in the second quarter, up from 129 million reais a year
earlier, according to the statement.

The company, Brazil’s only publicly traded investment bank,
was one of the managers of the 11.5 billion-real initial public
offering of BB Seguridade Participacoes SA in April. In the same
month, it advised the Kroton Educacional SA in purchasing
Anhanguera Educacional Participacoes SA for 5.45 billion reais,
the nation’s second-biggest acquisition this year, according to
data compiled by Bloomberg.

BTG rose 2.8 percent to 27.44 reais at 5:06 p.m. in Sao
Paulo. The shares dropped 14 percent this year through
yesterday, compared with a 22 percent decline for Brazil’s
Ibovespa benchmark index.